Five Tips for Creating a Successful Bakery Program
With mounting challenges like inflation and labor shortages, convenience store operators are examining the bottom line now more than ever.
Foodservice is a bright spot in the dim economic landscape, as convenience retailers saw a 14.3 percent year-over-year increase in total foodservice sales, based on the 2022 NACS "State of the Industry" survey. A vital component of every c-store foodservice program is the bakery case.
C-store customers are looking for an everyday treat, at any time of day — a morning pick-me-up, an afternoon snack, or a late-night treat. Craveable, snackable items satisfy these cravings, like cookies and doughnuts.
"The Future of Fresh Bakery" study from Rich Products reveals that 31 percent of consumers say they're purchasing more baked goods for an "anytime treat" now vs. previously.
This proprietary study examines how retailers —including c-store operators —can drive growth by evolving their fresh bakery portfolios, marketing, and merchandising. The report, which analyzed data from 2020 through 2022, determined that an engaging bakery experience can lead to increased shopper frequency and impulse purchases.
Five key recommendations from "The Future of Fresh Bakery" study are:
1. Know Your Shopper
The consumer landscape is evolving. Five distinct shopper segments emerged in the study, based on consumer behaviors from the IRI Consumer Network Panel with attitudes, needs, and usage survey information. Of the five bakery shopper segments, c-stores should focus on three:
- Engaged Explorers are the sweet spot for c-stores. They spend the most per bakery trip and make up 16 percent of fresh bakery buyers. They are devotees with a love of exploration and variety. This segment indulges in satisfying a craving for themselves, sharing a fun treat with kids/friends, and including food in a social occasion with other adults. Engaged Explorers frequent the bakery case in the morning and also enjoy sweet snacks throughout the day. C-stores can reach them by creating visual stories, focusing on flavor variety across all fresh bakery categories, and creating limited-time offers (LTOs).
- Special Treat Seekers make the most trips and comprise 24 percent of fresh bakery buyers. They crave baked goods with an eye on value and an appreciation for the specialness and fun of the fresh bakery. Special Treat Seekers make purchase decisions driven by price, especially compared with packaged bakery products. To score their sales, c-stores should offer special deals, promotions, and a variety of smaller-sized options to create more "treatable moments."
- Health Balancers are an important audience as they make up 15 percent of fresh bakery buyers and are health-focused shoppers with a preference for "better for you" baked goods. Since they believe "food is fuel," c-stores can win them over by providing premium experiences in a transparent, permissible way with smaller, individual, or bite-size portions.
2. Create Ambiance
When a retailer understands its target audience, it's easy to create an environment that attracts, inspires, and leads shoppers to purchase. All three of the target audiences —Engaged Explorers, Special Treat Seekers, and Health Balancers —prioritized freshness as a key purchase driver for bakery items.
In the study, consumers ranked the attributes that drove their purchases, aside from taste, price, and freshness. The bakery case's appearance rated highest in importance at 65 percent. Other top attributes were having a variety of options to choose from (55 percent), convenience (53 percent), and the aroma of fresh baked goods (48 percent).
Given these results, c-stores must keep the bakery case stocked and looking fresh throughout the day. This is why Rich's spent over three years developing extended shelf-life recipes for Fully Finished Donuts. All eight flavors maintain an airy, soft texture, fresh flavor, and longer ambient shelf life.
3. Offer Variety
The study uncovered three types of anytime treats that every retailer should offer. The first is snackable breakfast and mini-meal items that are portable for eating on the go. To satisfy snack attacks later in the day, c-stores should also offer bakery items that are fun, flavor-forward treats that can be enjoyed every day. And another solid menu item is a delicious, "better for you" snack with an enticing, unique twist or flavor.
Premium bakery items deserve a place in the case since they were a purchase driver for 37 percent of consumers. Two out of three shoppers bought these indulgences because they said they "like to treat myself/my family." When asked what attributes signal "premium," shoppers stated fresh fruit (46 percent), visible inclusions (42 percent), unique flavors (42 percent), and some type of decoration (39 percent).
Popular brands also rated highly as 35 percent of consumers said that brand is important when buying baked goods. National favorites like Hershey's and Reese's are popping up in bakery items like brownies, and consumers are eating them up. Plus, brand recognition is a high driver in digital ordering and is a key catalyst for future growth and expansion.
4. Co-Locate Impulse Drivers
Brownies ranked as the highest impulse bakery purchase at 61 percent. Other items that enticed shoppers include cookies (51 percent), cinnamon rolls (47 percent), doughnuts (46 percent) and muffins (42 percent). To tempt consumers, c-stores should merchandise these high-impulse items adjacent to planned purchases, such as placing brownies by the fountain drinks and placing doughnuts by the coffee counter.
5. Leverage Loyalty
Consumers are making fewer trips to retailers and incorporating new ways of shopping, such as ordering via an app and using delivery or pickup options. The key to reaching these consumers is inspiring impulse purchases on the app. C-stores can do this by featuring LTOs, bundling discounts, and offering loyalty points for bakery purchases. The sight of a premium baked good bundled with coffee in the morning will tempt hungry morning commuters.
Focus on seasonal and limited-time-offers, which will create differentiation from other retailers.
Delighting the three target shopper segments will pave the road to sustained growth. However, note that there's room to increase frequency across segments and categories. Rather than focusing on one shopper opportunity, c-stores should develop longer-term roadmaps to develop, innovate, measure, and refine strategies.
Content courtesy of Alyssa Barrett, Rich Products